Regression analysis is a forecasting technique which considers that, there exist linear relationship between dependent and independent variable.
Consider the data of sales of a company given below:
using following formulas:
Find forecast using following formula:
Now write formulas in excel as shown below to find forecast:
The result is shown below:
Therefore, using simple regression method forecast of sales for 2013 is 92,500.
To answer this problem, look at the operations of company X while paying special attention to each of the eight "key result areas".
The eight areas are market share, innovation, productivity and quality, physical and financial resources, manager performance and development, worker performance and attitude, profitability, and social responsibility.
Company X is currently seeking to develop a new innovative product which can be observed from its increased expenditures in research and development. This indicates that company X is seeking to attain a greater degree of market share by investing in innovation.
Company X's investments into research and development are aimed at developing new automation techniques that can help its manufacturing plant to achieve a greater level of productivity. Currently, the company is attempting to lean its operations, thus its physical resources are being reduced, but its financial resources are being increased.
With regards to manager and worker performance, the company is investing in training program to improve the performance of its employees.
The mentioned factors are adversely affecting the profitability of the company in short-term, however, the investments that are currently being made will lead to higher profitability.
The company is also actively involved in social activities.
An example of the difficulty of transforming a technical idea into a successful product or innovation is a steam engine produced by James Watt's.
This was a critical innovation for Industrial Revolution and was based on creating a device that could create mechanical motion from the power of steam.